Property Industry Ireland calls for lower VAT rate on new houses

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The volume of housing delivered in 2017 and 2018 will be determined by “policy decisions made within the first 100 days of the new government”, according to lobby group Property Industry Ireland (PII).

The group has issued a policy paper to Government and the various political parties and groupings in the new Dáil calling for a number of policy reforms to stimulate house building and tackle homelessness.

These include the appointment of a cabinet-level minister for housing, infrastructure and planning, a reduction in the VAT rate to 9 per cent for the lifetime of the next government, and speedier planning decisions so that it takes no more than 16 weeks for adjudication from a local authority and An Bord Pleanála.

The 14-page document was distributed to the relevant Government departments and the various parties and groupings in the past two weeks.

It wants a minister with oversight of housing infrastructure and planning policy to be appointed for three years, reporting directly to the Taoiseach.

PII says there are currently more than 12 government departments and agencies with a role in setting and enforcing housing policy in Ireland.

“The focus of that minister must be on overcoming barriers within the political process which are delaying the delivery of new, high quality, affordable housing,” PII’s paper states.

It has also called for “emergency planning and development legislation” for three years to fast-track private and public housing developments.

It said a ministerial directive should be considered to speed up planning decisions. “It is essential that planning authorities prioritise pre-application discussions with prospective applicants for housing developments,” PII said.

“Planning authorities should be mandated to put in place a checking mechanism to reduce significantly the national statistics of some 15 per cent of all applications being invalidated.”

It also wants a commission to be set up to review the tax-base of property to make it “sustainable , fair and equitable across its entire life-cycle, including development levies, local property tax, stamp duty and VAT”.

It wants VAT rates charged on construction reduced to 9 per cent from 13.5 per cent.

Currently, about 10,000 new houses are built annually with a construction output value of €2.4 billion. That generates VAT receipts of around €328 million.

PII believes the aim should be 20,000 new units a year with a 9 per cent VAT rate generating €437 million in taxes.

“These tax reductions would make many new housing developments viable,” it said.

Set up in 2011, PII is a division of Ibec representing all strands of the property industry. It has 100 companies as members and committee members include chairman Tom Phillips, a planning consultant, property developer Michael O’Flynn and estate agent Mark FitzGerald.